Becton, Dickinson and (BDX) 7 Nov 242024 Q4 Earnings call transcript

Hello, and welcome to BD's Fourth Quarter and Full Year Fiscal 2024 Earnings Call. At the request of BD, today's call is being recorded, and will be available for replay on BD's Investor Relations website, investors.bd.com, or by phone at (800) 839-1337 for domestic calls, and area code +1 (402) 220-0489 for international calls. [Operator Instructions] I will now turn the call over to Greg Rodetis, Senior Vice President, Treasurer and Head of Investor Relations. Please go ahead.

Good morning, and welcome to BD's earnings call. Vice and Senior Relations. of Rodetis, Greg President, Head Treasurer Investor I'm you joining Thank us. for being is bd.com. call available This made at via audio webcast this XXXX. results full Earlier releases fourth BD and quarter for year the fiscal of morning, IR The press can investors.bd.com. presentation release website on be at accessed and the

are BD's Leading and Executive President; Chairman, Officer Officer. today's call DelOrefice, Chief Executive Financial Chief and Chris Vice Tom Polen, President and

the remarks, for Mike Byrd, prepared segment. morning's segment; Tom segment; of Q&A Garrison, our this will Sciences joined and President Following be President Feld, presidents, by segment President Life Interventional of Medical Mike Chris of the the Rick and

we Before I statements. you remind that to we get be forward-looking started, will making want

available an in earnings website. disclosures between appendices the measures Relations unless and am changes the basis, comparisons read Unless otherwise it are percentage otherwise disclaimer can specified, period. very the fiscal You to versus be earnings Reconciliations year-over-year our of basis the included on are a on With made all relevant release Tom. on and Investor SEC release turn filings noted. that, revenue to will presentation. non-GAAP the I in FX-neutral our in and over GAAP the

good and morning, Thanks, Greg, everyone.

with the to to customers, revenue basis team as margin innovative, growth $X.XXX no which BD's to XX.X%. strategy. Earlier aligned in XXX points experience is teams, like BD well Science individual building deliver Mike's Excellence. life up also on we of QX and as I President segment, is or and more value suited Kaizen, diluted I'd in to sciences the Mike are welcome EPS, results, who forward his strong Mike expand behind principles our with reported August take lead First, high-performing and partnership today, our X.X% the expansion we There organically, a BD of brings to for [indiscernible] is moment known look adjusted joined Fell, leadership Mike our they brings BD Life culture. to from continue heartbeat deep [indiscernible].

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gradual and as X global strategy see term, remain strategic confident associates long 'XX, this broadly margin thank pharma customers of in of made whose and meaningful patients our more passionate to commitment in the FY consistently direction competitive execution team position the executed growth and we we on the for past year, is innovation top three, and operational our one, top deploy through drive excellence; growth line our and effectively priorities, of each which capital. drive performance; high-impact on on execute advancements making and serve. Reflecting our progress impact and important to Excellence two, we we focused durable market Over expansion are: BD our our on higher to commercial sustained a execution. We recovery, portfolio, bioscience contributors our guidance EPS XX.X% increasing of and moving plan, of us of $X.X and delivering well adjusted billion, operating original of all each quarter adjusted ahead free like positioning $XX.XX, and margin FY into full 'XX. I'd flow cash EPS year team's

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good Thanks, everyone. morning, Tom, and

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guidance Moving fiscal to for year our 'XX.

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margins to Moving and earnings.

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[Operator Instructions] is ISI. Evercore with Kumar Vijay Our from first question

X declining of together is in they're slightly look high grow is segments some that look on essentially this The life you it for Maybe are given those at of all reason is segments all like on in China, I maybe when dynamics. comparison for science the the mid- know singles And China QX. this flattish X, assuming of points some down. your flattish? here when headwinds Thanks to guidance all looks I XXX pharma those question these And basis you're peers, at year. But the like looks tools X here. biosciences details. ask versus I

be on your just that to to are phasing in does X% the those to So hurricane like that in here, about conservative. And [indiscernible]? feel X.X%, coming peers, understand in to is X guidance going want any trends but impact the segments related on QX still

there. appreciate comments Okay. Vijay. that I

our phasing. for to So assumptions I'll to it comments start turn year, I'll some the some Chris off and speak then with of just the over on

we we both guide are and bioscience was below the recognize we market. year, back our for space, going adjustment given So expectation below we the as think our to about on obviously said, reflect number that QX, as organic we an was broadly, stepping make the initial dynamics you life the it within that in Street And more very the to had science a midyear that full dynamics. while those modestly also was had was while range, recognize strong it that

pleased navigated as think step our really how we we're I those have teams spaces. back, with

a space or break That's tech out diagnostics in you X.X% in business year. X% for biosciences FY we If biopharma overall grew 'XX, about full company. our X% as the pharma med just that and

the pharma we diagnostic QX, at look the bioscience in you growth X.X% tech If were X.X% space. med space, in

as little strong in So core obviously, or the diagnostic quarter, seeing those in uptick very the period. broadly pharma the for versus even mentioned, on spaces. But X% what of full in full you a very the businesses. year those, And competitive the more bit tech versus X.X% bioscience market an it both QX was year the at of was the you're for med

the FY near health the a And commented And with we've comment you pleased just structural capabilities been given executing. our 'XX. I've built taking China how start our We're to serve a our as we've and on into and long view on our so maybe consistent unmet term, on we're forward, assumptions large cautious that very -- care opportunity also teams but term, help pleased for how for needs too, since and I on portfolio the think China in are the look in portfolio. those. me let we been with positive being with that, local

procurement you're the China, industry. broad pretty across so And seeing dynamics in value-based

assumptions. term, but we're good thing built assumes the overall, of strategic FY long-term we in see guide. We there. our position that very by that's term, nicely We that's decline to But 'XX, built and in long we've continue in in That because market. right position volume VBP impact strong we strong offset into very price. mid-single-digit the throughout our China, we the feel still volume on position. prudent. growth growth, think our in mid-single-digit guide to into expected combination resulting very -- do We decline for all holding China FY we a to think a continue that continued 'XX, continued our holding strong about Long very But

On in the -- space, uptick, bioscience pharma it's some you as we've QX. mentioned, seen

I think certainty still looks and with a like recovery to it's early too high forecast what timing there. curve

taking we're our a a so in well both Again, biosciences. position market and through prudent dynamics. positioned guide position rate pharma that going on and And like extremely X transitory have interesting, to got similar We've biologics. our of the that spaces It's really are the space in continuing a We're 'XX. at great in lot those innovation. we

dynamics mid- been the of being last businesses those several do X the long they'll in have term. Of take fastest-growing and our you that X to think, it's But fastest-growing we BD guide. BD we over more businesses us given mentioned, expect for X position years. the course, And into over the a for of built that those prudent we return to

turn Just on phasing. to it Chris the hurricane, on over then I'll

that. IVs. this we volume we're could products a seeing maybe significant of point. at and and broadly recovery procedure bit time, focused monitor could we some see help hurricane, -- the have some of customers. this seeing more we'll closely as that something modest it servicing It's not focusing monitoring larger today. monitoring. that on in of but those There's syringes watching of not using our impact customers business. don't are I'd impacts during a we're any replacements. for But the That's small gaps other just overall, the -- substitute the On where something that there's any we're People we're we're that impact our say on volumes, on see we're period servicing There's as

Vijay, it's Chris.

as relates your so just point, were things. a there. prudent phasing, is a it are that couple where year, the Tom's very of to we taken we've like the there, have One, posture not market to to competing -- real. last we business to We're relative On alone point, dynamics

of on relative of the half, the very our of it's all, midpoint script, the guide in the earnings, certainly first at about think balance to total year, you As second first of pretty of across our balanced XX%. phasing balanced I actually growth half, rate shared

a see lot don't there. you fluctuation of So

margin kind the as you steady we and to through there. normalized increase of a think of year QX You're going gross starting move sequentially see as strong

the We tend being first have by is move through total, QX So we year. I rate We're will XX%, of it, XX%. of to low of very average dollars as first though, dollar growth range revenue, total second quarter maybe to way the lower second dynamic One percent when half. On XX% think share think as a second the you the half. more where with it look P&L percent below dollars of half to kind a did above relates half. It of half, we going to for the first you're the will the of strong. at about a that have half phasing of dynamics, than versus as the end be the as think for be a lower guide

where be some the still mid-single with actually going businesses, You're And nuances that market prominent Systems in growth see digits. in we rate and about Pharm both low. Remember, will be last at these to year, QX QX. had would BXB dynamics most the we're

If look performance. you their go and at back

us. that's also comp quarter So in impacting the have actually a you

from Biegelsen Wells Fargo. And next Larry question our we with will take

or fiscal here. million It a $XXX about for nice on on 'XX? quarter sounds Alaris. meet X slightly just wanted goal like million Congrats of question to ask I $XXX Tom. your below. was QX Did Alaris

are for thinking I $XXX Alaris think fiscal million sales about to in your 'XX in relative you And 'XX? fiscal how expectation QX.

to here year the really we're it for start question, first full Mike in Thanks I'll turn and Yes. launches. a with the But moment. pleased maybe Larry. Aleris off of

As we outlook for had shared midyears Alaris. we updated our

as expected. We launch. the the run in historical expect rate fact, through saw at And year first come back within to we be Alaris of the that

built we we so 'XX into focused comments this rebuilding we're Maybe, to is feel also having that year. something on contracts, we additional And which also as add? go backlog any with FY Mike, good here committed a as launched

like mentioned, we're -- really as the really we're Just you performance. proud of

that times I just difficult think we question to year, positive. year through the directly. medical position, number, quarter the a last MMS bit dispensing. with year comparison in offset $XXX from of which but answer dispensing little did the did just and an was strong the a games a last million. the quarter-to-quarter standpoint, very We year There exceed with a had the a there. continued In from really implementing. is very there's the job positive And very, yes, year-on-year. to compare for Larry, great really

well as did in Alaris and of of terms feel quarter, like it's normal year, kind the feeling So the good. sort good next business feel of operating continue but and usual. back actually business we quite ability committed We manufacturing, through to in to the and that. backlog up of the that's serve things funnel about service, customers year ramp the have how customers. Feel our been contract like up to moved progression sales ramp good built our throughout and We're

expect We're as the -- great last is then remediation 'XX. team the one FY strong into to And much efforts a did well. thing do very job on growth Alaris just did really track. we as Maybe on go we add in we continued

thank for you the So question, Larry.

question Steed next from America. of our take Travis will Bank with we And

X% the kind for of phasing like with push a QX 'XX year, and the bit kind for just guide the Alaris strong. so I sub little so to full being especially of wanted on to

there's like but easy the some think there. Alaris year, throughout it's revenue And get of comps have tougher I know don't another in a year You built guide. you'd understanding comp. accelerating maybe then the pretty conservatism

confidence anything the provide of against still revenue on the So year growth comps? you accelerate just you that can tougher over can course

Yes. Thanks, Travis. and extra It's Chris. I'll a give little try color.

really year. typically think you with an have I've These profile actually how I again, terms basis, you about, it's QX. on This X again, what the market dollar that pretty ramps consistent with see. digits dynamics, of consistent growing absolute were BD mid-single is what last businesses all said, in revenue

our on our there rate. through comp know QX, I were headwind think in have So has moving of year, growth a base -- no growth cycling you we low recall, business, rate which a respiratory effect as into respiratory you last but year look this big was actually in our and you if

of headwind we you rates. really, feel think And you a good. So year-over-year when growth have

to per share second going strong with have super path throughout margin midpoint you're a sequential QX profile our would improvement as of growth call, So around impacted. improvement. a margins line just we reflecting businesses for improvement we market dynamics would margin kind half, importantly, of year-over-year of and earnings say with substantial gate guide see first below said, and on earnings, I top Like we're would are normal those I market the is I what call in then rate half, our year. certainly see, balanced what well more growth the not on that about And nice continue right biggest, the through the the we to then move of out line for I QX year.

question coming next from Robbie JPMorgan. our Marcus with And is

you rate there? sort of wanted how 'XX steady are you I underlying But put lot guidance the I back think kind through Alaris just ask a out get of next fiscal of as here. and in you of called -- realize I onetime that a dynamics guide, the growth just the at growth sometime 'XX 'XX strip we looking until and gave the into you business to us to will as the probably macro out and the year, sustainability run

we've Yes. obviously top of growth, COVID spaces. seen And We are Thanks growth higher-growth If extremely you that positioned look analysis. -- line underlying look company question, business. research feel period been then single really the transitory been well the X% strongest dynamics we've that how last here our at it our BD core which delivery are right? businesses and of testing cell cell into over the some on in over Robbie. you've spaces, on of science fast-growing right, life at biologic underlying in several there, that without moving obviously, and or X we And for time, years, -- right, the got north strong, about for quite good it's in drug our affecting growing

that space we about in in we as forward, at that sees going WAM side. our pharma So think dynamics happening life on for don't continue destocking to of overall X view we science the transitory short-term the change research the

good biologic we to of and or delivery, $X so Monitoring of platforms business. this at that's back of our $X didn't exist positioned now step if strong automation got you biologics we've crossed and BDXXXX, which -- a just at in feel look -- start size that year, not And which past pharmacy we're now, the levers and any multiple BDXXXX many the and about growth the A progressed really number that. of Patient Advanced now and of whether billion there. I the how we've growth largest drug space, the growth GLP-Xs, in well The billion there,

reconstruction shared, the opportunity really well as $X infection by view PureWick that surgery. Our you're we do platform, and XXXX. tissue we've prevention A in which, business seeing as billion

the high diagnostic on Now side. throughput molecular

position like spaces and to we're portfolio So reshape in in, opportunities continue to spaces the built. we're in going we our that portfolio. the continue on capitalize advance to really the and the to -- we've those that

the for Robbie. thanks So question,

Wood next with from And Morgan will Stanley. our take question Patrick we

topical Just it given benefit thinking as from supply the interrelates to impacts. pricing you moment, all around about in? within relative potential it's are tariffs, chain kind you And that? how onshoring any question go of to potential of Do paths at

impacts this that a for Thanks in the the see happened we when we perspective, dynamic from tariff that. Patrick. -- From Yes. question, past, didn't significant we saw were

manufacturing export perspective, today. scheme really China China always small There's we that in of our a strong from China grand quite strategy product it's only been And from local reminder, actually for a BD. in the as X has Just China.

go that's local monitor serve our things billions the set many served last we Sachs. well of markets and do will take strong et cases. we'll to very David with network U.S. we're watch, been board we when that. up the given We're forward, that's right, as cetera. But the many units, next So talk are something manufacturer space about our Obviously, across volumes the particularly we in that of -- moving is we'll strategy is certainly but has heavy local manufacturing obviously we question time. And a in from domestic our it navigating Goldman to Europe, out a But continue Roman that in with Europe

in sort bit wanted discrete And items as FY some on just we there little 'XX, to I dig more are a here. the P&L. of look here at to

accretion after declines. gross year-over-year in by headwinds from offset well QX, operating time, of as at many we of kind a growth quarters expense kind normalization and same higher interest M&A, as of year-over-year margin look a have did at tax as And You expense. the we turn see

think it So in construct and the here the drivers can us point FY about beyond of items? of help both how 'XX, the line normalized you think we across terms maybe in that just growth P&L should various about

Yes. I appreciate Thanks for question. the it.

So we're we about kind The be more shaping excited couldn't on BD excellence. how P&L. of focus the

on margin. progress we're saw half back of in the You making gross the 'XX, all it FY

improvement. about delivering XXX we operating year-over-year So basis about of talked points margin

the coming will reshape the P&L. be margin from this predominantly that us allows However, to year kind of gross first is

term. R&D, you specifically enable term levels have differentiated long both of and selling think that so and will shorter growth as We

complexity we view not BDXXXX outsized significant as first at inflation when very this out a P&L. Obviously, there. rolled go the time back was to And that we so you if and healthy the market

a been of doing in great has things margin, been covering we've those it So but lot gross headwinds.

that play first David. driver question, seeing the talk will a more you're and in our key that as we on the see basis. shows upcoming that Investor is continue, a go-forward up. certainly we Thanks out. Day. That value year as 'XX Now strategy for

next to move we'll And Matt Miksic Barclays. with

back. circle to wanted just Tom,

together kind thoughtful dynamics quarter But well to AI. the wanted you're my put into progress really mentioned a into what helpful. in doing the market and account just question, I a guy super taking little and more this down in drill of is You for bit

work products outage of of that that there, maybe You of you're of a you're how to those or putting that or at mentioned strategies? data technologies some systems kind fuel BD enabling generating series distributable you

for Matt. you Thank Yes. the question,

we'll where February highlight kind on we're which to really Day demo of You're doing Investor there, us teeing about. XX, get for we're of actually our some up and excited what

you has just in number if of a for this space focused years. So back, quite step been BD

is [indiscernible] at microbiology then on what that and from technology started that all narcotic where the a be at to they're and with occurring. platforms them we creating hospital We where We the autonomous utilize bacteria in there's have utilized stop we describing cases, software reading and [indiscernible] is determine looking several with why specific the or clinicians algorithms are and help system a market happening the use Microsoft risk identifying could our growth be that AI. That in dishes their been helping is, and at health not, determining then that for our some today that to products data get partnered into built across that's and diversion platform. believe automating and basically risk, care that systems

of job really be algorithms to infusion business a how AI closed to devices. on impact its actually patient occur predict been XX, changes Pyxis our platform. Day on that with where cutting also We'll into working excited call, that be said first can we're our AI across concepts BD care on. We did in that their is to more really doing great place help will with the taking therapy new the can the help about we're using advanced allocation going AI Investor that ever hemodynamic predict monitoring future. the is loops we're now as help mention, future our course, platform you has Of be in exciting new will at in just be to about, And could new excited integrate prevent all that February with launch a create using but at and our to BD occurring building able in combined be the from patient and of technology really pump something there it devices that sharing

able be to be data. are for that to able to analyzing we're that we'll will businesses better across clinicians first create platform the and an of devices staff devices data to that that take efficiencies AI-enabled them of being AI And and so connect as better that think able series into with BD about be create devices Pyxis for cloud-based our from new outcomes, use launching

our on of on much a Again, Investor a coming Day at in deeper that. little bit we'll preview. but up February, hands go sneak

devices on there, I comment, think given out we have smart data. certainly we we -- significant millions X generating the X other just right? of devices innovation there about Matt, a smart million is opportunity side, out are particularly see maybe have -- We

create that new things And the use do to data and to outcomes. so opportunity right,

of So we there. positioned a thinking time lot we're We've about really been spending that. think uniquely

R&D also Some that Chris incubator we're this mentioned investment space on more applying in and creating products, actually focused of increased AI a well. operations. in the as earlier, but our broadly, new is it We're

on there and course, as forecasting there's have large footprint, perspective, Of to it side from operational performance, a well. we a line efficiency our initiatives real opportunity OEE and applying use optimizing it the

again So the question. thanks for

And Jefferies. we will take Taylor our from next with question Matt

that was thoughts segment and to going going over now could give contribute how grow time additional APM, it's how talking us your margins if some could forward? just the And were strategy. on you've you I you to just wondering closed connected you think about that

other are you how connected additional perhaps So I integrate on there data? smart it of was that and the wondering segments and and generating some with could thoughts if the you develop had that

Yes. Thanks Matt. question, for the

staying the stay down about can excited team. innovation got capitalizing lead that ahead. they the great more integrate, happy be opportunities and on coming say that is going immediate really couldn't sure we we heads momentum on APM they've could focus customers, fit our and Katie servicing driving an So integration really We're cultural that I'd they're BD. into the executing better, as having be that making focused

of BD. didn't at see intact. And missing in excited us X% to business and the the the of again, a in some all discussion as growth long we and into As deck term, the a at the them we think launching as business. for first we year. part our time not into least We continuing coming fiscal that in been year. do We that that it view about go this beat X% they're certainly They -- we're about. is this the month products shared well that that's we miss they've highlight had did it

on the I integration the had deal. side, think shared this announced we we when

One managed the which for hemodynamic, a important talk really is hemodynamics, and critically rationales medications the outtake. the really was between right, coming when on connection there's of pressure medication fact management of we time that it's key together things what's that the by patients, managing understanding us fluid our most the to that's customers that ill one being is their and medications blood real and because their intake

body, combine can into patient's you X, and if through what's body you the which patient's get optimizing that patients we they stable patient's better in and the what's so the to And in Alaris and keep what the happening start know going body, that going the what's really is start patient's the impact informatics letting the can into know body with outcomes. of algorithms

X were our for things of that X space. top that that's And in customers the asking

year that P&L additional 'XX our APM the actually from selling, led in of we've mentioned, R&D. project for Chris will be our gross that -- this expansion funded some That's investments so -- includes a business. And reinvestments part as we margin also we in by

start. it after in getting space. to And And teams that the so right it's early, opportunities but excited already our about really the innovate are we're from

the you question. So for thank

will And next take Rick with question Wise Stifel. from our we

Maybe allocation. capital we can turn to

want again, their integrate -- XX the more lack step the like on about? to you value highlights in a momentary a near allocation you stock. XX back inherent the to be dividends as capital to we to acquisition $X your seems interpreting candidates, it tuck-in share over broadly strategy about related views this of or term from anything positive compelling APM? of and Is things. Should taking announcement and certainly months value A as me a billion Your your talk value, maybe next else couple and lack -- Becton of repurchase

allocation, in strong capital We've cash progression. flow extremely healthy cash Chris. We cash free question. on grew a and margins with guess, FY into goal I Appreciate been to about flow. year of $X before and it 'XX. way strong We get it. Rick, It's at financial had we the obviously flow This gives conversion, exceeded first, our really thanks. is billion XX%. the think starts ending more focused cash our flexibility free flow us by of

largely allocation capital I unchanged. priorities are think our

we going cash on exciting rely but billion you that's acquisition. remaining value announce single-digit M&A, did of increase see digested We've You over where $X we're to opportunity, always to on. grower. continue an that in We're something dividend APM. reliable tuck-in out high flow at a that prioritize extremely the we're position X.X%. It's for us said a That's can free durable just capitalizing focused

And so that. about we're very excited

of still consistently intrinsic to frame So the 'XX, disciplined value executing we level strong XX about a to kind stronger strong cash flow just step $X of cash against do will want up and have of our felt position like, we billion to With remain which over flow said, in momentum that see while the X.Xx, net what BD, time flight position to we leverage in the path leverage.So. we driving share X.Xx down continued XX repurchases months. that in about we same could net given a with

very to appreciate I cash we'll the focused asking flow, so. do part, it's you and think on We've another important I been question. and continue

Thanks for the question, Rich.

answer time, additional and to like At any the question for session. Tom turn closing comments. over today's conclude this floor I'd to or back Polen will that And

you and for effectively today. drivers supporting and take our continued driving call with 'XX our moment Thank Investor our growth market and heading BD. a enabling support positioned momentum customers to well of of margin us a earnings advancing everyone patients BD like Day. expansion at dynamics again with the serve. Well, for we the are us strategy, strong thank deliver and are associates forward I'd into Excellence you in we global our portfolio to We team call look across of joining believe our on We who FY our thank lives improving our and again, your QX connecting navigate to cash to in February on profile. multiple

This joining On a wonderful you day. BD, today. of at time, lines conclude this have thank Please behalf and audio does for disconnect your webcast. this